OmniAmerican Bancorp of Fort Worth is merging with Tyler-based Southside Bancshares in a $307 million stock swap deal that will create the ninth-biggest banking company in Texas.
The Fort Worth bank’s management team, led by CEO Tim Carter, will remain in place to run the combined bank’s North Texas operations, which will carry the Southside name, Carter said. The deal is expected to close toward the end of the year, he said.
“This merger of two strong institutions is a superb strategic fit, creating a well-capitalized, community-oriented bank with a major presence in East Texas, Central Texas and now Fort Worth,” said Sam Dawson, president and CEO of Southside Bank.
The news sent shares of OmniAmerican (ticker: OABC) up $2.07 a share, or more than 8 percent, to $25 by early afternoon.
“We see tremendous growth potential in Fort Worth, as well as powerful synergies from teaming up with one another,” Dawson said in the prepared statement. “We are excited to partner with OmniAmerican Bank, which shares with us a proud tradition of outstanding customer service and an unsurpassed community commitment.”
Southside, with 50 banking centers and 49 ATMs, has approximately $3.4 billion in assets while OmniAmerican, which has 14 branches, held $1.39 billion in assets as of Dec. 31.
Nearly a quarter of its lending is in the form of municipal loans, counting Austin, Galveston and smaller communities among customers. It expects to have its new Fort Worth staff offer these loans, Dawson said. It will also provide trust department expertise to the market; OmniAmerican doesn’t offer trust services currently.
“Bringing together our branch network and Fort Worth presence with Southside Bank’s 50 facilities in Texas gives us a dynamic foundation to serve our commercial, mortgage and consumer customers with even greater convenience, expanded product and service offerings, and additional lending capacity,” Carter said. “This merger is a great outcome for our company’s shareholders and positions us well for sustainable success over the long term.”
OmniAmerican shareholders will receive 0.4459 shares of Southside common stock plus $13.125 in cash for each outstanding share of OmniAmerican, the banks said. Based on Southside’s closing stock price of $30.46 on Monday, the value to OmniAmerican shareholders would be $26.71 per share.
The Fort Worth bank had informally capped its commercial loans at $15 million, but as part of Southside that level will be raised to $30 million, Carter told the Star-Telegram. That means it could underwrite larger projects, like hotels, office buildings and real estate developments.
“Because of our combined capital, we are going to find OmniAmerican is going to sit at a bigger table for loans,” Dawson said.
Dawson said the merger would bring some efficiencies, but he did not identify areas where overlaps or redundancies exist. Both he and Carter said possible layoffs haven’t been considered.
Southside now has a “triangle” market presence in the state — Tyler, Fort Worth and Austin, where it has two branches.
“Whether we increase the footprint around the Metroplex, that’s a possibility,” Dawson said. “There’s room to expand,” he went on, but first the company wants to fully absorb its expansion to Tarrant County. “We will continue to look at opportunities in other markets.”
Last September, Bloomberg News reported that OmniAmerican was seeking a buyout. A mutual savings bank, it went public in January 2010 and was required to wait three years before soliciting takeover offers.
Before converting its charter to a bank in late 2005, OmniAmerican was a credit union, opening in 1956 as Carswell Federal Credit Union for staff and personnel at the former Carswell Air Force Base in west Fort Worth. It changed its name to OmniAmerican in 1992 to represent its expansion to employees beyond Carswell, which became Naval Air Station Fort Worth Joint Reserve Base in 1994.
When it decided to sell shares to the public for $10 apiece, it raised $119 million from investors, largely its own customers.
Carter, a longtime Tarrant County banker with JPMorgan Chase and its predecessors, has headed the bank since 2007. He headed the Tarrant County United Way for nearly three years before joining OmniAmerican.
This article contains material from the Star-Telegram archives.